Market Report: IAG's takeover of Aer Lingus stalls

IAG’s takeover of Aer Lingus continues to stall.

The British Airways owner has been in talks to snap up the Irish airline for weeks now, with little success. Yesterday its plans suffered another setback after the Irish agriculture minister Simon Coveney said that while talks to sell the Government’s Aer Lingus stake were continuing, the latest €2.55 a share offer was not “persuasive enough”.

IAG slipped 13p to 551p, not helped by a revival among oil and gas operators that hit other fuel-hungry businesses. The budget airline easyJet dipped 33p to 1,752p, while cruise operator Carnival slid 67p to 2,875p. At the other end of the table Tullow Oil gained 9.1p to 407.3p, BG Group improved 19.9p to 971.4p and oil and gas engineer Weir Group climbed 49p to 1,911p.

The B&Q owner Kingfisher fell 6.6p to 341.3p after Barclays warned of “earnings pressure on all fronts”. The bank’s analysts don’t buy the argument that quantitative easing in Europe will boost the housing market and warned that competition in the UK is increasing.

The FTSE 100 ended the week once again tantalisingly close to record territory, up 26.3 points at 6,915.2. The level to beat is 6,930.2, the close reached on 31 December 1999.

Serco rocketed 11.5p to 211.9p after Credit Suisse said its upcoming rights issue may not be as hefty as predicted. The troubled outsourcer, which suffered four profit warnings last year, said in November that it needed £550m from investors after identifying £1.5bn in writedowns. But Credit Suisse said Serco looks likely to get more than forecast from the sell-off of one of its Indian operations, and as a result the rights issue could be as low as £75m.

The plastics specialist Essentra hiked its dividend by 19 per cent as it reported a 50 per cent-plus rise in pre-tax profits to £99.78m. Essentra, up 78p at 963p, also announced it was snapping up an Australian plastics distributor.

Is JP Morgan unsure about Plus500’s results next Wednesday? The bank sold off around 3 million shares in the Israeli spread-betting operator. It still holds just over 5 per cent of Plus500, up 16.5p at 586p.